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Priced out of home ownership

bbc.co.uk

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Re: Priced out of home ownership

#301

Post by dalyons »

BigJono wrote: post #52
fl0ki wrote: post #34

I'm an expat now but I'm hearing it's even worse back in Australia. [Disclaimer: Some of this may be off because I'm hearing it second-hand, not actively investigating myself, so corrections are welcome] I hear people who are already in the top 1-2% in income are told their borrowing power is only A$1M (~U$660K) while houses at all worth raising a family in cost A$3-6M. Banks don't seem to want to lend to them becaus…

Australia is always going to be worse as long as we have this weird government/cultural pumping of housing as an investment. Every single bogan here talks like the absolute epitome of life accomplishment is to have a property portfolio to laud over the plebcunt renters. The idea of investing in production or business is laughable, you don't hear it mentioned at all. Our biggest software employers are banks and real e…

I’m an Aussie who’s lived in the US for 10+ years - you are spot on. Every time I go back all everyone can talk about is property investment and house prices and buying rentals. It was starting when I left 15 years ago but has reached fever pitch now. Play a little game with yourself - see if you can get through any group social event without the subject of property coming up.

It’s very sad. Australia used to have a somewhat egalitarian mindset, but this is creating such a massive generational wealth and class divide that gets wider and wider every year. No one seems to understand the damage their quest for parasitic income is doing to society.

Re: Priced out of home ownership

#302

Post by alex_duf »

fairity wrote: post #208

I don’t get articles like this. It’s arguably a better financial decision to NOT buy a home, and park your downpayment in a broad based index fund. I get that there are arguments for or against, but there doesn’t seem to be a clear financial advantage to home ownership. So, what’s the big fuss about? Just pay rent and carry on? Surely, there are better things to focus on?

Surely you can see the difference between giving away a significant portion of your income to your landlord, or paying towards your mortgage.

In one case you can sell your property and get your money back, so you can decide to do whatever you want with it (like index fund if you so chose). And in the other it's your landlord who's either paying their mortgage with your money, or placing it in said index fund...

Re: Priced out of home ownership

#303

Post by baobabKoodaa »

spacemark wrote: post #296
nradov wrote: post #236

Earlier quoted context omitted.

Home ownership isn't a good financial option for everyone, but for most consumers who aren't accredited investors it's the only way to make highly leveraged trades. You can't buy an index fund with 20:1 leverage. Of course this occasionally blows up, but even then the downside is limited. Even if ownership doesn't make sense from a financial standpoint it's still somewhat essential for parents of school age children.…

People always talk about how buying a home is the only way for the common person to obtain leverage. Please excuse my ignorance, but how does the common person use that leverage, exactly?

Example:

House costs $100k

You buy house with $20k savings and $80k debt

In this example that $80k of debt is called "leverage".

Is this what you mean with your question or did you mean to ask something else?

Re: Priced out of home ownership

#304

Post by screye »

whoknowsidont wrote: post #196
DGAP wrote: post #180

Stop subsidizing demand at the national level. Stop restricting supply at the local level.

That's not the problem at all. Stop allowing people to buy multiple homes. Stop allowing landlords to "collaborate" on prices.

Both are band aids for the real problem. Housing can't both be an investment and a basic need. You need to pick one or find an opinionated middle ground.

If housing is an investment, then remove all protections and open up the supply. No height regulations, no minum parking regulations, no mandatory HOAs. No moratoriams or legal protections when loans default.

If housing is a need, then regulate it like a limited resource. Ration it on the lower end. Ban hoarding (vacancies, empty plots). Limited access to repeat consumers.

When the powerful talk about "finding balance", they usually mean having their cake (earn like an investment) and eat it too (protected like a need).

IMO, Georgism strikes the best opinionated middleground of housing as an investment vs housing as a need. Grounding taxation in land's economic value regulates hoarding. Grounding the value of land in its economic outcomes makes it a transparent investment, rather than the cartelized asset that it is today.

I'm personally opposed to too-much-regulation. It always ends up being a tool for the powerful. Rent control, Prop 13, affordable housing, stacks-of-paperwork and similar regulations always do more harm than good.

Re: Priced out of home ownership

#305

Post by intended »

JumpCrisscross wrote: post #280
deergomoo wrote: post #243

Earlier quoted context omitted.

No-one can kick you out of your own home because they want to rent to someone they can charge more. No-one can tell you you can’t change the wallpaper in your own home, or remodel the bathroom, or get a dog. Not everything is a purely financial decision. A home is primarily a place to live, not an investment opportunity.

> No-one can kick you out of your own home because they want to rent to someone they can charge more Property tax isn’t voluntary and as exogenous as a landlord. (Also eminent domain, to say nothing of most peoples’ mortgages.) > Not everything is a purely financial decision Making the largest leveraged purchase of your life for an emotional comfort object is irrational. That doesn’t make it wrong. But it ceases to b…

You are mixing up a few things somewhere.

Wants are infinite.

Home ownership is effectively enshrined as a value in most economies. The emotion is part of society’s design. Conforming to this incentive or belief is not unusually irrational,

Re: Priced out of home ownership

#306

Post by baobabKoodaa »

fairity wrote: post #208

I don’t get articles like this. It’s arguably a better financial decision to NOT buy a home, and park your downpayment in a broad based index fund. I get that there are arguments for or against, but there doesn’t seem to be a clear financial advantage to home ownership. So, what’s the big fuss about? Just pay rent and carry on? Surely, there are better things to focus on?

I had the exact same thoughts as you when reading the article. It seems that many people are irrationaly fixated on home ownership as some kind of magical pathway for wealth. When you ask these people to put some numbers on paper, that magic goes POOF pretty fast.

Re: Priced out of home ownership

#307

Post by blondie9x »

cyberlurker wrote: post #100
jncfhnb wrote: post #87

Earlier quoted context omitted.

Handouts to the homeowners does not feel like the right call here

Senior living centers are often atrocious and still can set people back over $10,000 a month. I think a program could be designed without being a handout. One option could be if you’re going into a government run senior living center you need to pass that money down to whoever was going to inherit it/receive it through donation. And that has to be a taxable event to cover the cost of the subsidy on senior living. Peo…

I'm not talking about just senior living or senior care places. I'm talking about total independent just 55+ or 62+ senior apartments that have affordable rents available. There are very few of these and waiting lists are usually completely closed off and take 10+ years if your name is called at all.

Re: Priced out of home ownership

#308

Post by s_dev »

bigyikes wrote: post #300
whoknowsidont wrote: post #196

Earlier quoted context omitted.

That's not the problem at all. Stop allowing people to buy multiple homes. Stop allowing landlords to "collaborate" on prices.

What do you suppose happens to all of the people renting from landlords with multiple properties?

It's a bit like when a big chain goes bankrupt - the profitable restaurants don't close another buyer comes in and takes over. Like Red Lobster and the staff in the profitable restaurants stay the same the renters stay in the same apartments or houses paying the same rent.

Re: Priced out of home ownership

#309

Post by jachee »

tmnvix wrote: post #274

People intuitively jump to the conclusion that the problem is caused by a lack of building. While more building would help, a lack of it isn't the main cause of this problem. Ask yourself, do Canada, Australia, New Zealand, the US, Britain, Ireland, etc, all have the same inability to build or is there maybe some other common cause? In my view this is symptomatic of a more fundamental issue - global asset price infla…

> This is a problem of underutilisation in my view. Too many properties are being used as investments and not as a primary residence.

I've believed for a long time that heavily taxing income from second+ properties, similar to capital gains, would help reduce rent-seeker hoarding, to help free up and reduce the cost of properties for primary-residence owners.

Re: Priced out of home ownership

#310

Post by FactKnower69 »

tmnvix wrote: post #274

People intuitively jump to the conclusion that the problem is caused by a lack of building. While more building would help, a lack of it isn't the main cause of this problem. Ask yourself, do Canada, Australia, New Zealand, the US, Britain, Ireland, etc, all have the same inability to build or is there maybe some other common cause? In my view this is symptomatic of a more fundamental issue - global asset price infla…

1000%. I will never get tired of teaching people (it's news to every single one of them!) that at any given time, there are more than 20 empty housing units in the United States for every single homeless person on the street (https://www.self.inc/info/empty-homes/). There is not, nor has there ever been, anything resembling a "housing shortage". We live in a post-scarcity world as far as housing is concerned, and have for centuries. There is absolutely no barrier to housing every single human being beyond greed.

The entire framing of the issue as a false NIMBY/YIMBY dichotomy is a distraction from the reality that there is not and has never been a supply issue. The only issue is artificial demand from speculators who choose to withhold and deny a basic human right in the hope that it might magically raise in value for no reason instead of depreciate like every other asset.

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